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On-Demand Customer Service - part 1

Does
it mean the end of the contact center as we know it or will it prove to be the catalyst
to a new level of evolution?

Part 1

What is driving the need for On-Demand
Customer Service and what are the components that make it work?

A revolution enabled by new technologies and shifting
consumer habits… companies rapidly ascending to unprecedented levels of success
by putting information at our fingertips and giving us the instant
gratification we want… an innovative new industry redefining commerce by making
people’s lives easier. These are just a few descriptions applied to the growing
phenomenon known as the ‘on-demand demand economy’.

The
effects are already having a significant impact on the larger economic picture.
According to the Harvard Business Review, more than 22.4 million consumers are
active users of on-demand services, accounting for $57.6 billion in annual spending.
The largest category of on-demand
spending is online marketplaces such as Ebay and Etsy, with 16.3 million
consumers each month, shelling out almost $36 billion annually. On-demand transportation,
with ubiquitous names like Uber and Lyft, is second with 7.3 million monthly
consumers and $5.6 billion in annual spending, followed by food/grocery
delivery at 5.5 million monthly consumers and $4.6 billion annual expenditures. Home services/beauty services, freelancers
and the like bring in an additional $8.1 billion

A 2015 National Technology
readiness survey, cited in the Harvard Business Review summary, indicates that the
on-demand economy isn’t solely the domain of the wealthy. 46%
of on-demand consumers have an annual household income of less than $50,000,
and only 22% have an annual household income of $100,000 or more. It appeals to
people in all geographic environments, highest (39%) among people in rural
areas and small towns, and almost equally divided in outer suburbs (30%) and
cities (31%). Men (55%) outnumber
women (45%). Caucasians represent a far higher proportion of users (63%) than African-Americans
(17%), Asians (12%) and Hispanics (9%).

Access
to automated, fast-paced service technologies is dramatically changing the way
businesses interact with their customers. One immediate outcome is that people now
expect to have their information requests and service issues addressed
on-demand as well. And just as the Ubers, Etsys and InstaCarts have disrupted
their respective spaces, the customer service industry is now scrambling to reinvent
the relationship between people and technology to ensure that people get the
information they want when they want it.

Businesses are taking a number of different paths to providing
on-demand service. Some companies are reassessing the way they deploy human
capital assets, seeking cost-effective options to increase agility and
flexibility. Others are investing in a variety of automation technologies. Numerous
organizations are taking hybrid approaches to blend human resources with
emerging technologies.

One solution extends on-demand customer service beyond the confines
of the contact center. San Francisco based Directly offers predictive routing
that can identify which experts in a company’s community are most likely to be
able to resolve contact center tickets. The solution is designed for companies that
outsource inquiries to external users of their products. It enables them to
determine which individuals would be best suited to respond to inquiries based
on similarities between incoming tickets and past tickets that had been successfully
resolved.

These expert users, who are recruited because of
their affinity for, and extensive knowledge of, a company’s products, are
either given financial compensation or other tangible rewards for their services.
Their expertise and enthusiasm often exceeds that of hourly contact center
workers, making it a win-win proposition. Such experts answer questions on-demand
whenever and wherever they are available. According to Directly co-founder and
CEO Antony Brydon, using this method provides significantly faster response
times, delivers CSAT ratings that average 92.5% and offers demonstrably higher
resource efficiency. Directly technology plugs into help desk solutions or can
be integrated into a website. Companies such as Pinterest, LinkedIn, OfferUp and
Republic Wireless are using Directly to route inquiries to their expert users
and provide “person-to-person” service while reducing the number of inbound
tickets handled by staff.

“The fundamental nature of work is changing from a fixed
workforce to a fluid workforce,” noted Brydon. “Companies that adhere to a
fixed workforce model are going to struggle to compete. The second chapter of
on-demand isn’t technology. It’s on-demand talent. Of all of the different
functions…sales, marketing, engineering…it’s our belief that the first pie
wedge of a company to move forward to on-demand is customer service. ”

Of course, not every type of business is currently positioned
to route inquiries to external experts. Most organizations are looking at less
complex strategies to provide on-demand service. This includes increasing their
use of part-time and freelance workers, recruiting and integrating work-at-home
agents and working with solution providers who offer the services of a scalable
squadron of cloud-based specialized agents.

These approaches illustrate the changing role of agents in
the on-demand economy (or as some refer to it, the “Gig Economy”) where hiring for non-permanent
positions and utilizing independent contractors for short-term engagements has become
the prevalent business model.

In a July 2016
blog, Mike Bourke, SVP and GM for Workforce
Optimization at Aspect noted,
“Historically, most contact center agents had been employed as regular 40
hour/week full-time employees. But recently, pressures from many different
directions point to a different future for a sizeable percentage of the agent
population.” Among the factors he cited in this evolutionary process were:

- Cost savings in the 30% range Employers do not have to provide benefitssuch as payroll taxes, worker’s
comp insurance, unemployment insurance, vacation time or health benefits for
part-timers or contractors. The Affordable Care Act is a major driver in the
push to hire part-timers. A study by the American Health Policy Institute
determined that the annual cost of the ACA to U.S. employers is estimated
between $4,800 to $5,900 per employee. If the employee’s average working time
is less than 30 hours per week, this expense can be avoided.

- Millennial Agents Millennials have become the largest
segment of today’s workforce, particularly in contact centers. They place a
high value on work-life balance, making them ideal candidates for work
schedules that flex around their personal lives.

- The Emerging Prevalence of Work-at-Home
Agents The 25%
annual growth in the number of work-at-home agents is not only impressive, it’s
an indicator in the direction of the contact center industry. Work-at-home creates opportunities
for a broad segment of the population with physical disabilities, childcare
issues or those who are located in remote areas. With more part-time workers,
contact centers have a more agile workforce that can ramp up and down quickly, matching
contact center staffing to call volumes. In addition, companies can choose
agents with highly specific skillsets from anywhere in the nation.

Work-at-home has also become an
attractive alternative to offshoring. Arecent CIO articlenoted thatwhile overseas labor rates are typically 40 to 55% lower
than onshore rates, increased automation options have helped defray some of the
extra expense of home-based agents. Work-at-home agents are now typically 5 to 10% cheaper than
on-site professionals in the U.S. Software Advice, anevaluation companyfor call center software,reported back in February 2014that although call center jobs went off-shore during the
1990s, many have returned to the United States.

There
are also on-demand options available for businesses that either want to have a
well-trained workforce at their disposal without the high cost and complexity
of hiring their own staff. They can be
ready to scale up to ensure the right amount of high-quality coverage during
unexpected spikes in demand. ‘LiveOps Nation’ is the term specialist LiveOps
uses to describe its network of 20,000 work-at-home agents who handle over 100
million interactions a year for a roster of over 200 clients. LiveOps’ strategy
is to source both a higher quality and quantity of agents while disseminating a
certification program employing a distance learning methodology delivered on an
advanced eLearning platform.

“When
you choose to outsource and utilize a virtual agent model, you get a different
type of quality agent,” said Greg Hanover, chief operating officer, LiveOps,
Inc. “With no limits to the sourcing footprint, we can find motivated quality
agents no matter where they are located. This enables us to give clients a
flexible call center model with passionate agents who have an affinity for
their brand.”

The
segment with perhaps the greatest growth potential for delivering on-demand
customer service is automation. This encompasses a broad spectrum of
technologies including the increased use of analytics, predictive routing,
improved multichannel service solutions, robotic process automation, artificial
intelligence (AI), and natural language-powered (NLP) virtual assistants.

A
recent Everest Group study, cited in an article in CIO noted that so-called
“enabler technologies” accounted for about half of the reported investments by
contact center providers from 2014 to 1015 — with analytics, automation and
multichannel tools the biggest areas of spending,

The
use of NLP virtual agents is also a surging segment. According to outsourcing
and technology specialists, Xerox Services, 56% of consumers say they’d be happy
to use a virtual agent. While consumers can’t always access sophisticated IVAs
at this point, this is a technology whose time has come. Xerox believes that as
the costs of contact center services continue to increase, there will be a
greater incentive for companies to get automation right. In a recent study,
they estimated that 36% of contact center volume is a direct result of digital
channels failing to provide timely, accurate answers. They predict that
“robotic process automation and artificial intelligence solutions, based on
machine learning, will offer the capability to deliver service that matches or
exceeds human interactions”.

Web Self-Service, SMS and chat are also alternatives to voice
that can provide service at the speed that customers now demand. Companies such as 800 Flowers and Fandango are now experimenting with customer
service bots that combine artificial intelligence with text messaging programs
to understand requests and provide answers via messenger.

Stay tuned. In our second
report, we will take a closer look at how these on-demand customer service
technologies will affect the contact center workforce.